Potatoes, Co-ops, and Marketing Information

The potato industry has organized itself. Partially facilitated by modern technology, as in the Internet and conference telephone calls, the Idaho potato growers organized a cooperative in 2004. Under the existing law, farmers can organize without violating anti-trust law. The co-op was able to reduce production, in part by running a bid program, as well as coordinating marketing.

Abstract of a paper from SSRN:
High potato price volatility, decreasing demand for fresh potatoes and prices below the cost of production led to a decision of a number of Idaho potato growers to organize the United Fresh Potato Growers of Idaho, a marketing cooperative. The programs and strategies of the cooperative target both production and marketing of fresh potatoes. To evaluate the effectiveness of the programs implemented by the cooperative, we examine the level and volatility of fresh potato prices during two periods: before the cooperative was organized and when the cooperative is in the market. We find empirical evidence suggesting that fresh potato prices were higher and less volatile during the period when the cooperative was in the market.

The whole thing is interesting for those who remember farmers struggles to cooperate over the past 90 years or so.

Medicare and SSN

The NY Times reports that Medicare is resisting changing the Medicare card to remove the SSN.

Ms. Frizzera, the Medicare official, said that issuing new Medicare cards would be “a huge undertaking.” The agency would need three years to plan such a move and eight more years to carry it out, she said.

Medicare officials estimate that it would cost $500 million to change their computer systems if they issued new ID numbers to beneficiaries. Doctors, hospitals and other health care providers use those numbers in filing claims with Medicare, which pays a billion claims a year.

I regard this with the disdain it deserves. The state of Virginia has phased out SSN's as the drivers license number. I recognize that Medicare is not used to issuing new cards every 5 years or so, but I assume they have procedures for replacing lost or stolen cards. And they have procedures for handling erroneous numbers (i.e., if they give out a card with the wrong number they're able to reissue a new card with the right number). Those two capabilities can be the basis for the changeover because they supply the business logic for the change. The third and missing element is a process to generate a unique 9-digit number for Medicare recipients. All they need is a cross-reference file matching their number to the SSN. Match all bills against the file so the provider can bill using either the SSN, if already in the provider's database, or the Medicare number.

The bottom line is, they're going to have to do it someday, might as well do it now.

Two Nations Forever

Sometimes I'm optimistic about the future, but then I read this Post story about a southern Maryland church chorus, trying to bridge religious and racial differences and I conclude there's no way.

With just two weeks until their first performance, Jefferson [chorus leader] jumped into practicing the two songs the choir planned to sing at the concert. For the slow "Lord We Worship You," he told them, imagine a quiet candlelight dinner with God. For the upbeat "Blessed Be the Lord," use "your country voice," he said.

And learn to move, he told them. Clapping was not an option at this point, as past attempts had ended with the black members clapping on the second and fourth beats and white members clapping on the first and third.

But some aren't so easily discouraged:

"It's not in everybody's culture to do the moving, so be sensitive," Jefferson said. "We're a little, how do I say it, challenged in that area. It's going to take awhile. We're going to bridge it together. Bridge the cultures."

Start with baby steps, he instructed. Tap your foot. Or rock back and forth.

"Just try not to laugh at each other."

How Americans Do Things

Haphazardly, because our government is not a strong state. For evidence, read this NYTimes story on the levees along the Mississippi. (Almost wrote "levee system", but it's not a system.) The latest issue of the American Historical Review has an article arguing, unsuccessfully in my view, that the U.S. has a strong state. If the comparison is to France or other European models, I disagree.

Bureaucrat Dies

Well, he may not have been exactly a bureaucrat, but he dealt with people as part of his role in a big bureaucracy--the Fairfax County police force, and he's now dead, prematurely, at the age of 6.

The Monkey Cage picks up the story from the Post.

Surprising Factoid of the Week--Chinese Govt Worries About Customer Service

Al Gore, before he was elected President, worried a lot about the government and customer service. Apparently the Chinese (mainland, not Taiwan) do too, because Alex Tabarrok at Marginal Revolution reports:

At the Beijing airport as the customs official questions you, you get to rate them - there is an electronic box, hidden from their view, that asks for your rating of service.

The idea of the Chinese government getting feedback from their customers boggles the mind.

Wetlands and Oil Drilling

Steven Pearlstein has a take on offshore drilling in the Post. To sum up:

The frustrating thing about this standoff is that both sides have it half-right. Republicans are right that we need more oil and gas drilling, more refineries and a revival of nuclear power. And Democrats are right in demanding that we finally get serious about conservation, crack down on speculation and market manipulation, and recycle windfall profits into alternative energy sources.

Unfortunately, they're both so thoroughly captured by their interest groups, and so determined to defeat the other's policies, that they haven't noticed we're now so deep in the hole that we have no choice but to do it all: Gas drilling off the coast of Florida and wind farms off the coast of New England. Curbs on speculation and curbs on CO2 emissions. Tax hikes for oil companies and tax breaks for solar.

I often like "a curse on both your houses" thinking (was that Shakespeare?). I don't like NIMBYism, which accounts for much of the opposition to offshore drilling. But I've also a knee-jerk reaction, a sort of romantic feeling that progress is steamrolling everything and wondering why we can't keep some things forever. I guess, contra Pearlstein, Dems are more right because drilling means tapping an expendable resource. If we don't drill now, nothing happens to the oil and gas. Our descendants can someday drill if they think it advisable. While the Democratic proposals are permanent--once we do solar, we can keep doing solar forever.

I would suggest, though, the possibility of "mitigation". The law permits farmers to drain one wetland by mitigating the damage by recreating another wetland. In other words, the law says we're going to always have X million acres of wetland, but it may not always be in the same place. I wonder whether it's possible to take the same approach to drilling. If an oil company exhausts one field, make it clean up its mess and then allow it to drill the same number of acres somewhere else. That approach might provide some flexibility for business and reassure people like me that drilling doesn't mean a permanent, forever, loss of the environment.

Farming and Bananas

I'm always interested in farming, I found this bit on bananas in the Philippines at Freakonomics in the comments (general post on bananas):

I’m from the Philippines and we do grow a lot of bananas. Most of the banana plantations are in Mindanao because of the stable climate conditions and fertile soil. The crops from from these plantations are only for export, and they only grow Cavendish there. The bananas they pick are still unripe when harvested to keep them firm durig transportation.

About the condition of the employees. Right now, employees of large companies like Dole and Del Monte experience fair labor practices. Most of the land of the plantations were under Agrarian reform, so the farmers own the land, which they rent to the companies to plant. The farmers are hired as employees, so aside from rent from land, they also get wages, and they have a stable job. These gives them incentives to be more productive, and hence higher manufacturing efficiency.

But this was not the case 30 years ago, before land reform. Farmers were tenants, and they were planting the land which were owned by really rich families. They had no security of tenure. They were overworked and underpaid, and yes, there were no healthcare benefits. there was also child labor: children of farmers would rather skip school and help in planting to increase family income. Also sometimes, there were unjust land owners. They have control over the farmers and their families because they feared being thrown away from from the farms, their only livelihood and their homes. [Is the land reform significant--wish I could find a study of the land tenure arrangements across the world. I'm speaking as a descendant of someone who was a renter in Ireland but owned a large estate (by Irish standards) in Illinois by the time he died.]

And in the Philippines, bananas are staple foods, specially in the really poor provinces where rice and corn are very expensive.

Surprising Factoid of the Day--the French Export Food [Updated]

From the CAP Health Check (the blog on EU ag policy):

The UK runs a large trade deficit in food and agricultural products, at around 22 billion euros or 13 per cent of GDP (see table below). This makes global food price increases especially damaging for reasons that I’ll explain below. By contrast, France runs a trade surplus in food of almost 5 per cent of GDP.

I'm too lazy to check, but I doubt the U.S. surplus is that big.

[Updated: Turns out the French export more wine than we do soybeans or corn and the Brits export more beer/ale. (2004 figures). And our 2008 exports are only $91 billion (record high value) but that's tiny compared to GDP/GNP of $14 trillion. That differential explains why the French do more for their farmers than we do for ours--the agricultural sector is much more important.)

Veal

Via Down to Earth, this post on a project for organic, humane veal shows some of the problems of these efforts in mass society:

So, ironically, even though the chefs love the flavor and the Azuluna story and that the flavor and texture is excellent regardless of the size, many of them will stop buying it or complain to the distributor that it lacks consistency in size. This is a problem for the high end cuts only - as the chefs are fearful of serving chops of differing sizes and charging the same price. The solution to this problem is to get more producers raising the veal and to expand the market into NYC. This would balance out the size problem, as cuts could be grouped by the distributors according to size. However, in order to recruit more producers, I need to promise them a market.

So, we consumers want consistency--no surprises, please. But that implies production practices and a scale of operation that's difficult to develop. In a way, we want what we had years and years ago, but destroyed because our preferences valued consistency, uniformity, etc.

(This subject rings a small bell for me--we sold our bull calves at about a week or 10 days. The old quip goes that the dairy is the most feminist place around.)